Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

FOMC Preview: Will Fed Give Taper Start Date?

By Kathy LienForexSep 21, 2021 04:40PM ET
www.investing.com/analysis/fomc-preview-will-fed-give-taper-start-date-200602606
FOMC Preview: Will Fed Give Taper Start Date?
By Kathy Lien   |  Sep 21, 2021 04:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
There are only three more Federal Reserve monetary policy announcements before the end of the year. If Fed Chairman Jerome Powell wants to give the market ample time to prepare for tapering asset purchases, the central bank will need to make some type of announcement tomorrow. There’s no doubt that the topic of taper will be addressed, most likely during the press conference. The one question that will determine how the market responds is the taper start date. 
 
The only thing market participants want to know from the Fed on Wednesday is whether it will provide a specific taper start date. For the past few months, it was widely believed that it would lay out a precise plan to reduce asset purchases in September. At its last meeting in July, the Fed said the criteria for providing ample notice had not been reached. In August ,at Jackson Hole, Powell said the central bank is likely to begin tapering before the end of the year, but added there is still “much ground to cover to reach maximum employment,” which is seen as the criteria for a rate hike.
 
All this hesitancy to begin the taper process was before the most recent disappointments in non-farm payrolls and inflation. The latest downside-data surprises, along with heightened market volatility, almost assures that the Fed will not provide any specific guidance tomorrow. Instead, it will probably acknowledge that economic activity has eased but express confidence in the recovery. Powell should confirm that he still expects taper to begin this year, but it is too soon to decide if it should begin in November or December. 

Trading FOMC Rate Decision

 
Quite frankly, November or December doesn’t really make too much of a difference. And if the Fed wanted to be a bit more precise, it could. Trading the FOMC rate decision will be tricky because it is a two-part announcement. At 2 p.m. ET/18 GMT, the FOMC statement, economic projections and dot plot will be released. At 2:30 p.m. ET/18:30 GMT, Powell begins his press conference. If there’s any guidance on taper, it will happen then. 
 
Economic projections and the dot plot will give the first clues as to where the central bank stands. 
 
In July, when the last projections were released, seven policy-makers favored a rate hike next year, with two of those looking for more than one hike.
 
If either of those numbers increase, the U.S. dollar could pop higher. The reaction should be sharp and brief. Inflation forecasts are expected to rise but growth projections should remain unchanged. 
 
Then comes Powell’s presser, which is the wild card. Investors will be disappointed if no precise start date is provided and the U.S. dollar should weaken initially. 
 
However, at the end of the day, if the main takeaway is that the Fed still thinks taper will begin in 2021, a few more months won’t make too much of a difference. If that is the case, we won’t see a long lasting durable sell-off in the U.S. dollar. 
 
The Bank of Japan also meets tonight (before the FOMC), but no changes are expected. Growth is slightly better, but inflation is still very low. The Australian dollar remains under pressure after the Reserve Bank minutes confirmed that the central bank sees interest rates remaining unchanged until 2024, which would put them far behind the U.S., U.K., Canada and New Zealand.
FOMC Preview: Will Fed Give Taper Start Date?
 

Related Articles

Kathy Lien
FX: Big Week Ahead, What To Watch By Kathy Lien - Oct 25, 2021 13

Inflation and GDP reports from the U.S. and Eurozone along with three central bank monetary policy announcements makes for a busy trading week. Big tech names, like Amazon...

FOMC Preview: Will Fed Give Taper Start Date?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (28)
Puck roger
Puck roger Sep 22, 2021 10:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yearout projections how often are they right I guess it's just the the way things are done
khushi Informative
khushi Informative Sep 22, 2021 6:06AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
please highlight main points
Chris Black
ChrisBlackforex Sep 22, 2021 3:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tapering talks now or never?
William Bailey
William Bailey Sep 22, 2021 1:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Scam… taper started in May with selling treasuries on the reverse repo market . This taper talk stuff is a ploy to keep suckers in the markets …. Crash very near as real GDP is 40 percent of what is needed . The free cash is wearing off
amakye jonas
amakye jonas Sep 22, 2021 12:49AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Philip Bolin
Philip Bolin Sep 22, 2021 12:49AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
DEVAa senapathi
ADEVA Sep 21, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Very thanks for presenting a Well informed article Madam..
Mohammad Tariq
Mohammad Tariq Sep 21, 2021 11:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Does it effect on gold
JAMES CUNHA
JAMES CUNHA Sep 21, 2021 10:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I believe it will.
ARYC EDWARD
ARYC EDWARD Sep 21, 2021 8:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
not yet
Modern Matrix
Modern Matrix Sep 21, 2021 7:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Would be suicide to mention tapering. Powell will make market go brrrrrrr
Bear Bak
Bear Bak Sep 21, 2021 7:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Let's Taper already *****
Paul Browning
Paul Browning Sep 21, 2021 7:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The longer we delay ending the extraordinary support the Fed has provided for over 10 years, the worse will be thr end result. It might already be too late to avoid a serious recession or a depression. This is also being pushed along by the high degree of inequality in the world and especially in the U. S.
William Bailey
William Bailey Sep 21, 2021 7:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Paul Browning yep. More free credit and only 1 percent of the population can drive the economy … 99 percent will be in the streets
Honest Abe
HonestyPays Sep 21, 2021 6:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this joker is out to save his job, no way he says anything except we'll let you know...standby....everything is transitory...we need more data...
Meru Pet
Meru Pet Sep 21, 2021 6:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
inflation wasn't that bad. the problem is the tapering.
Bear Bak
Bear Bak Sep 21, 2021 6:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
which that's not even bad. Media using it to scare investors. Well let's taper already.
William Bailey
William Bailey Sep 21, 2021 6:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Meru Pet time to stop giving money to the top 1 percent
martin waititu
martin waititu Sep 21, 2021 6:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the usd will be weak Powel is so much consenttating on employment and inflation and olso delta variant which are already bearish which means the usd will waken
queen premiu
queen premiu Sep 21, 2021 6:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hi I'm new
fg n
fg n Sep 21, 2021 5:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks
queen premiu
queen premiu Sep 21, 2021 5:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm ready
Muhammad imran
Muhammad imran Sep 21, 2021 5:44PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hi I m new
ROAD TO PERDITION
ROAD TO PERDITION Sep 21, 2021 5:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why announce tapering?  Let people buy and sell their securities based on their own bias and information.  It's like the Pre-Market --it sets the mood of the trading day especially when you announce a 2 % drop before the market opens.
William Bailey
William Bailey Sep 21, 2021 5:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Its a diversion scam . Tbey have been tapering since May by sellimg 4 time as much in treasuries on the reverse repo as they are buying with the 120b a momth to wallstreet
Mario tragik
Mario tragik Sep 21, 2021 5:34PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lol of course not and the market knows it, and you probably know it too.
James Pattison
James Pattison Sep 21, 2021 5:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Kathy i bet someone wants to know how fed officials made millions trading stocks through the pandemic… but its not you… you wont ask fhe tough questions
Chris Poulos
Chris Poulos Sep 21, 2021 5:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
who is she supposed to ask?
John Smit
John Smit Sep 21, 2021 5:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why don't you ask yourself?
Stephen Edegwafe
Stephen Edegwafe Sep 21, 2021 4:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dollar is bullish already whether tamper or no tamper,check ur monthly chart.it is right there.
Meru Pet
Meru Pet Sep 21, 2021 4:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
they said they are gonna give hints, if i remember well... unemployment is the key
Meru Pet
Meru Pet Sep 21, 2021 4:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
from yahoo "But Fed Chairman Jerome Powell has already communicated to markets that the timing of a so-called taper “will not be intended to carry a direct signal” on the timing of eventual rate hikes."
hamid reza binandeh
hamid reza binandeh Sep 21, 2021 4:11PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Okey and complet
Legandary Mafia
Legandary Mafia Sep 21, 2021 3:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
@kathy can you please give us the direction, like last time? 🤔
Olga Haldemann
Olga Haldemann Sep 21, 2021 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Would USD really be growing right now if markets responded to economic data alone and not as drivers of tapering timeliness?
srinivasa rao Pulapaka
srinivasa rao Pulapaka Sep 21, 2021 3:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
as Always very sensible, informative & Prescise information without any Jargon
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email